Animal Spirits Podcast - The Most Crowded Stocks (EP.234)

Episode Date: December 8, 2021

On this week's show we discuss the growth stock crash, the third web, and wonder if Paul Thomas Anderson is overrated.  Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by our friends at YCharts. Michael, we've been playing around with a new feature on Y charts lately. They now have a scatter plot, which potentially came from you as an idea or was it them? Me. Not to brag. Michael's idea. So the idea is you can have two different points and you look at different metrics or different companies. And Whitecharts sent us a few ideas here. So they looked at IPOs from this year in the U.S. 2021 IPOs alone. Not great. Yeah, they plotted the market cap and then the return for this year. Out of almost 300, about two out of every three are down, 2021 IPOs. That's pretty opposite from what we saw last.

The only really good one here, I guess, is Lucid Group is up like 400%. Some of these other ones I've never heard of, Coinbase obviously is down. Interesting. So they also looked at trillion-dollar companies, and they looked at market cap versus the trillion 12-month net income. And this is one of these deals where sometimes in a scatter plot, you can actually find things that make sense, like there's a standard relationship. You can draw a little line between it and say, hey, this makes sense. This is one where it doesn't really make sense because you have some of

these huge companies that have very little in the way of net income. Some of these other companies that have a lot of net income, like Tesla, for example, does not have a lot of income. Apple and Amazon and Microsoft do, Berkshire Hathaway does. I guess we're calling Facebook meta now. Anyway, I'm not. Me neither. If you want to learn how to use these scatter plots like us, go to Ycharts.com. Tell them Animal Spirits sent you. And if you sign up for initial subscription, they will give you 20% off. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's wealth management. All opinions expressed by

Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only. and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. This was the week where the wheels really fell off of, I guess, call it the arc industrial complex, all of the high beta negative tech earners that were all the race in 2020. And it's not just this week. These things have been getting smashed for a long time, But this was the week where it seemed like everybody paid attention to it.

Arc fell to a 52 week low. I mean, there is. I guess a lot of the stuff. There is blood in the metaverse. The popular growth stocks peaked in February, I guess, or March. It's been a while. What are you, J.C. Peretz? I'm just saying, like, a lot of these companies, they spiked in January and February.

And now they've come in and they've had a couple different crashes. And they just keep crashing. Well, I guess what's new is that now, like, they're all crashing. So it was Zoom and Peloton and Zillow, but now it's even getting to the Shopify's and squares of the world. So Jim Bianco, which we're going to lean on him for a few charts this week, put out some great stuff showing... Bianco, nice charts, right? Beautiful charts. Good looking charts here.

Beautiful charts showing the S&P 500 equal weight and it's down, what is it down, four or five percent maybe, versus the Morgan Stanley most expensive index. I can't see what this says. but just absolutely sluttered. Just look at the two lines. It's a crocodile mouth. I guess that's the thing is we talked about this a little bit last week, how market cap can really hide a lot of this stuff. But even the equal weight index is doing fine.

It's just literally this one segment of the market that everyone just loved. So Morgan Sandie has this other beautiful chart showing a basket of crowded stocks. They recorded their worst performance on record ever versus the S&P 500 on Friday. So it's not just like, oh, everybody's finally noticed. No, no, no, no. They were buckling. They were getting killed, but the wheels really fell off on Friday. Bloomberg, and this, I guess, came from Peter Atwater, who is in this Bloomberg piece. They're onto this. They're calling it a Quentin Tarantino market because they say everything's fine in the front room, but then downstairs, someone's got the ball in their mouth and the leather stuff on and someone's getting killed potentially. Step aside, butch. Yeah, all these stocks are getting, we've talked about a lot of them, but they said, they looked at the most crowded names by, I guess Morgan Stanley has this index of the top 50 most crowded stocks based on 13F filings. by hedge funds. And then they said that crowded basket, an excess basis was down like 11%

versus everything else, which is its worst, brutal. Which is his worst relative performance since even March 2020 saying that this stuff is just getting wrecked. I guess, I mean, a lot of this people focus on the retail, but this is hedge funds. This is actual, this isn't just. Well, that's what I was going to say. So one last data point. Then we'll get in some editorial, as they say. Liz Anzander said the basket of the most short of tech stocks, which is ironically also the most crowded trades on the long side is down 48% worse drawdown, which is worse than the drawdown earlier this year, and worse than the bear market of 2020. Wait, so these bears are actually finally having a little bit of... Finally. You know what? Good for them. It's been a minute.

Something finally ended badly and they were right. I got a ton of people texting me on Friday, and by a ton, I mean three. But still, three is about 100% more than I normally get. It's bringing up the average. Of people screenshoting me, their Alibaba, their portfolio, literally what do I do it? I'm like, what do you ask me for? I sold Zillow. I sold Palatine. Don't ask me. So, but it's very interesting that all of the professional investors, not all, but a lot of old professional investors who are wagging their finger at Arc and Kathy Wood and the Wall Street bets crowd. It's very interesting that it's the hedge funds that are also piling to this. But okay, so now what? So now the wheels came off. They got their comeuppance. You could wag your

finger in their face if you want. What do you win? Here's the thing, though. What do you get? So obviously, like, the arc underperforming eventually was a pretty easy cult scene. So I wrote a piece in like the end of December last year talking, I did a history of the hottest funds in history. And Ark was on there. And I actually used some of your book, big mistakes, nice little plug for you. You had the piece on Jerry Sign in the 1960s.

And I went all the way through all those hot funds. And my point was saying, like, eventually they're going to perform. That's pretty easy. I'm not going to pat myself in the back for that. But I was wrong in this context because Ark did peak February or March. and it's down 40% since then. The thing is, I plotted this on the chart you see here. I plotted their AUM versus their fund performance.

And I said, when that happens, all this new hot money is probably going to exit as well. Now, it's been nine or ten months. By the chart that you're about to reference is wrong. Why? I forget why. I spoke to Rushi. It's not accurate. Okay.

So cut this segment out then. Well, money is coming out. It's not as clean as what we're looking at. Wait, so you're saying that the drawdown in AUM is not showing why. It's not accurate. Okay. So, Ben, the people that were waiting for Kathy Wood to fall apart, which the fund has, where's their prize? What do they win?

Well, they win a market that's only down three and a half percent. That's the crazy thing to me is that I think a lot of people said, once this speculative excess is taken out of the market, watch out below because the market's going to get creamed. And here we are. And that, so the market itself is down three and a half percent from all-time highs. It's doing just fine. So here's the thing. Everyone has wanted to believe this is 1990s 2.0 for a long time now. And when the excess leaves like it did in early 2000, watch out below and the whole market's going to crash, is it possible we could see all this excess stuff, the speculative euphoria,

all that stuff, get creamed and the market just kind of shrug and say, all right, well, we did. We did. Because we saw a big growth sell off in May, and the market shrugged it off and went on to new highs. It's possible that this bleeds over into the broader market. hasn't yet. Here's another interesting chart from Lizent Sonders. With volatility has come swift correction and frothy behavior. And sentiment trader, by the way, where has he been in our lives? I feel like I haven't referenced. Packing McCormick boxed him out for a while for you have a

attention. Hang on a second. You only have one crush. Honestly, did he block. Did he block me? I still follow him. Okay. Okay. He did not. The other reason I'm asking is because I haven't mentioned him in a long time. I feel like I haven't seen him tweeted in a while. I think it's just because you have crypto blinders on right now. So, you just like walk up for a blackout. And you're like, whoa, Benitrator, still here. He's still doing this thing. All right.

So they tweeted, so the dumb money confidence, which is smaller odd lot traders, like the people that were texting me on Friday. By the way, one of the people who texted me on Friday bought Arc. I don't know if I said this on the podcast because it's not in good taste, but I definitely told you this, Ben, that he bought Arc in December and said to me, I literally don't think she could lose money. I think you're saying it to me that. day and you're like, okay, this thing is topy, that that's it. I mean, okay. Funny, though,

I saw him like two or three months later. Actually, it was in the spring when Arc was in its initial drawdown, and he said, I'm shorting Arc. By the way, that was really bad taste with a short arc fund, but they nailed the timing on that. Nailed it. Yeah, S.R. S.R. Good ticker. That's pretty perfect. Okay. So dumb money confidence has dropped while smart money, which is large commercial hedgers, has grown most confidence since March 2020. So, This is an interesting juxtaposition where smart money, take that for what it's worth, is getting more confident to wear a dumb money. I don't like that term, but it's blowing out. Which is funny because the dumb money was really smart last year. They looked smart and felt smart

probably. There was an article advice about, I lost everything on Alibaba call options. This was a tough read. What was interesting was that GameStop was a tipping point for this person. So they said that they were like dabbling crypto stocks, whatever, but they really like went all in when GameStop had that moment. That's when this person got laserized for stocks. They had like 300 grand in an online savings account, and then they went from that to buying options. And it was one single contract. I've used this analogy before.

This is your high school friend who never drank in high school and wagged their finger at you. And then they go to college in the first weekend, they're throwing up in their bed and they have like three Zimas or something and they can't handle themselves and they're hung over for the rest of the semester. That's basically this. This is a good takeaway. And by the way, kudos to this person for ready. So honestly, they have a good head on their shoulders.

They understand that there are bigger tragedies in life, and they seem to be okay, even though, my God, this has to hurt very, very, very badly. I don't know how you come back from this, honestly. It's tough. It's tough. Mentally. This to me is the lesson. Ben, we had a person email us.

What do I do about Alibaba? This was like three weeks ago. And so the problem is if you don't have some sort of risk management going into these high growth stocks, you have to have an exit or no exit where you're going to position yourself such that you can live through the inevitable 50, 60 percent draw that's because they are inevitable. And potentially put more money in. Like, you have to have some sort of game plans. It's got to be one of the other.

Yeah. Otherwise, you're just paralyzed. It consumes you. So this person said, I sold and shut down my Robin Hood account in October right before my birthday. I decided I don't want to have this hanging over my head. The day I sold it, I was like, you know what? I fucked up.

It was a mistake. But clean slate, dust yourself off and move on. I felt better when I sold much better actually. And that is probably always the right answer. I think what people are afraid of is that I just rolled this thing down 40%. I can't sell now because now I'm going to make matters. worst. I'm going to sell at the bottom. Guess what? You're probably not selling at the bottom. Here's what I thought was the worst part about this. First of all, this person, they kind of

blame Robin Hood, but also took a lot of personal. They said, listen, this is my fault. No one else's. They kind of said, Robin Hood didn't help. But I think this kind of thing happens with or without Robin Hood. But they said, when I lost the money, the thing that I regret are the most, we're not actually losing the money. I realize I just know their passions at all. For three years now, all I've done is work. I can't think of one weekend when I was just having fun. How stupid is that? So not only did they lose money, but all the money that they piled up from working so much, They stockpiled. They then blew that.

So you're also not only wasting money, you're wasting time because all that effort at work is just gone. Oh, your boy, Ryan Reynolds is on CNBC. What's he talking about? He's an entrepreneur. He has a gin company. He's got a production company. He's the man.

By the way. Man, he is a handsome man. We'll talk about Christmas movies at the end for recommendations, but someone really gave me some crap about Just Friends. I'm sorry, if you don't think Just Friends is funny, then we can't be friends. I agree. This is a true story. It happened right here in my town.

One night. 17 kids woke up, got out of bed, walked into the dark, and they never came back. I'm the director of Barbarian. A lot of people die in a lot of weird ways. We're not going to find it in the news because the police covered everything well up. On August days. This is where the story really starts. Weapons.

Speaking of Handsome, I've never seen JFK. I started. it's like a three and a half hour movie. I started watching JFK this weekend. Young Kevin Costner, what a stud muffin. He had a fastball, right? Holy cow, like I was handsome. He still is as John Dutton, but my God, was he a handsome man. Okay, where are we going? Oh, Ben, can we say that now that all of these young traders have experienced a blah bear market? Are they good to go? I am really sick of that saying like you've never, yes. Now can we stop making fun of them? Okay, they experienced bare market. Now are they pros, now are they geniuses? Now can we stop dunking on them? I agree.

And now, this is a crazy, I want to talk about this a little bit more when I come to New York to visit you in a couple days. Can't wait to see you. I'm excited to. But I feel like every trader investor with any experience now has four or five different paths they could take. We have the 70s here. Well, this is the 70s. And now we have, no, no, no, this is actually the 90s where we're going to have another good decade like we just had in the 80s. And then someone goes, no, no, this is actually 2000.

This sounds like a blog post that you're half bait that's in the oven. Just start considering that. where like every historical analogy right now, that path is there for anyone to take if they want it. Just let that one simmer a little bit. Think about it for Thursday, okay? Okay. My knee-jerk reaction is 1860s, but...

All right. All right. We'll put a bit in that. So, DocuSign, holy shit. You ever see this before? Was it down 40% in one day? So this segment is called Bad Quarter Guys. What happened?

Admittedly, I did not even get to the earnings report. What happened? Is the fax machine making a comeback? Maybe the fact. that we complained so much on your interview with Max from DOMA about the fact that you can't use DocuSign with refinancing yet, they need to get into refis. That's the problem. By the way, so people may have missed it Saturday. We've released it. We had an extra That was awesome. What a chat that was. Yeah. Immediate man crush we had on Max. He was a great

guy. We got along very well. During the recording, I said to Ben, all right, when we're done recording, we totally got to ask this guy if we could invest. And then typed it, Domain, I said, oh, shit, they're public. Yeah, public company. So we can invest. Yes. But DocuSign is a company that was already getting slaughtered, and then it fell 40% in a day. Here's a lesson. Two people were asking about Alibaba, and this is, again, a while ago, it can't go any lower. Oh, yeah? Never say that. Well, here's the thing. Because as much as you think stocks overshot to the upside, they can always go further in one direction or the other than you think. It's a pendulum. Yes, that's a thing. In 2020, in January and February, when things went absolutely bonkers and the game stop took off, there was so many stocks that went way far this side. Everyone kind of said, how can this thing be trading at 30 times sales or whatever it is?

And at the time, a lot of people were like, well, it can't or the market doesn't care anymore. Valuations don't matter, whatever. And now it's going to go the other way. And I don't know, this is the kind of thing. And again, Palatown went from 24 times sales to three. 24 to 3. The crazy thing is we're going to have some survivorship bias in five to seven years where 20% of these companies are going to look like amazing purchases. But then the other 80% are probably just going to kind of tread water or not really come close.

to getting back to those peaks? I'm going to go higher than 20. Okay, you think more than that? And by the way, although when you are saying to yourself, this can't possibly go any lower, that's probably close to a bottom. Do you think yes or no? Yes, but here's the other thing in the back of your mind.

The fact that the market is only down 3.5% and these things are down 40, 50, 60%. Don't you go in the back of your mind? Like, well, what if the market falls down another leg and the market goes down 15%. These things aren't just going to rise, they're going to fall more. You have to have that in the back of your head.

Unless it's first out, first end. I guess. That would be my thinking, though, that when the market falls, most other stocks fall as well. So everything is getting slaughtered, except for treasury bonds. We'll talk about crypto a second, but what was that status? You tell me about Top Shot? Oh, someone just the... Whatever. It's everything. And, and good news, commodities. Okay, so commodities are falling. So I have the Bloomberg commodities that it's down 10%. Oil prices are down like 15 to 20%. Do you put any credence into the fact that we can use this as a signal that inflation may be topped, that when commodity prices are falling, that's a

a sign that inflation is falling as well? Do you think that there's no correlation there? I bet you there's no good data there. But in this case, I'm going to just hope that the answer is yes. By the way, here's another bet we should make on Cal Shea. Will the Bloomberg Commodity Index be up or down in six months? Okay. There you go. I say down. You know why I say down? I would almost like down as well. Because I'm a Patriot, Ben. You know this. Documented Patriot. I say down. I think this was probably four or five weeks ago. You put in a story here about get ready for higher gas bills this winter because it's coming natural gas prices. Well, natural gas futures posted, this is from Bloomberg, posted their biggest November loss in 20 years of prices down 30%

from recent highs. This stuff is getting crushed. And they're saying they're blaming it on there's warmer weather than people thought. And so maybe gas bills aren't going to be all-time highs for people. What about gasoline? Like car gasoline. I feel like that's coming into. I think I saw a chart about that. Yeah. So I think gas prices across the country are now mostly going under $3 a barrel. Thanks. You're going to have to go take all your stickers off. Or can it still say I did that? And more good news. And maybe it's a little premature to dunk.

But listen, we'll take it. On the supply chain side, bottlenecks appear to be easing. So it says this chart from Morning Joe. The number of container ships waiting outside Los Angeles, Long Beach, fell considerably in November. Thoughts? I think the Flexport guy tried to debunk it a little on Twitter, but it does seem like it's getting better. Well, all right.

Be that as a May. Counter sent tweeted getting close to a five-month low for ocean freight rates between Shanghai and Los Angeles. Okay. Did you read the CNBC piece on Amazon? USA! I think we're getting there. Did you read the piece on Amazon and then CNBC?

I did not. Because last week I said, hey, how come I'm getting all my stuff from Amazon? It's coming on time. That's a good thing. We've been saying that. How come Amazon there's no delays? Okay. So they said that for years Amazon has been chartering their own private cargo ships.

They make their own containers. And instead of going into the L.A. port, they go to this port in Washington and truck stuff down to L.A. if they need to. They've already gotten ahead of this. I mean, of course, Bezos was ahead of this. Are we past the point of him being, like, one of the best business minds of his generation and probably one of the best business minds of all time? What'd have been past?

He's not the CEO anymore, as you know, but what do you mean past? Well, I'm saying instead of just like this current cycle of business people, like, historically, he's on the Mount Rushmore. Oh, yeah, yeah. He figures everything out before it has to be figured out. I mean, read the story, and you're like, oh, okay, Amazon kind of already figured this out before everyone else. Yes.

And everyone else is going to have to fall in line, probably, and some of these other big companies are scrambling to do this now, and Bezos already figured it up before everyone else. So before we get into the crypto news that we made last week, Robin, my wife, went to Austin, Texas for the weekend. And Austin, Texas is a crypto hub. A red pilder? She texted me, this was on Saturday. Can I get Coinbase? So I said, LOL what?

And then she said, to do crypto. And then I said, oh, my gosh. So she came home, and I was like, what were you asking me about crypto? Because you know, like, we're invested and, like, we made this index. Like, we're kind of there. And she's like, well, they were just talking about like all this stuff, like the third web and whatever. And I said, Web 3. She's like, yeah, that.

Like, can we do some of that? Oh, dear. For the record, because I know people are like. Did she hear like people talking at the bars about this stuff? No, it's her friend's husband. I have tried. I want to let the record show repeatedly to include my wife in the finances. And I've got rejected at every turn.

We're in a similar boat here. Yeah, it's not like I haven't tried to tell her about whatever. Our talks now are basically just, are we okay? Yes, okay, good. That's all I want to know. Yeah, I'm not going to say, like, Robin, like, what do you think is Heath going to flip Bitcoin? Right. So you're not sharing, like, your metamask.

What happens if you die, is it going to be like memento where you're going to have to have a tattooed on yourself somewhere, your 12 thing for your metamask wallet, like your 12 code words or whatever? Like, on your inner thigh, follow this to get your... All right. A new movie for Web 3 era. We talked a couple weeks ago, I said, you know what? I'm not going to go as deep down the rabbit hole as you. I need to just invest in this stuff passively.

And obviously... I made a solution for you. You're welcome. Yes, I think so. But last week, you announced this. We got a bunch of publicity on this, which was nice. And you guys had Jeremy Schwartz. So if people want to listen to the compounded friends of you and Jeremy Shorts and Josh, you get more on the details.

What do we announce? That we have a new crypto index that we created with Wism Tree. RwM. Wisem Tree. wisdom tree crypto index yes and we worked with on ramp and wisdom tree and Gemini and all these different companies it's interesting though like even with passive investing and making this an index I was saying this to you last week there's still a lot of decisions you have to make and I think even more so in this space than you have to do in stocks we were batting around ideas in this for months

and months kind of had an idea and then wisdom tree kind of shaped it it it's not easy to come up with an index in this space because of the way that this whole entire space is constructed because you have, if you just said, I'm going to take the top 10, you have stable coins, and you have ripple, which is, I don't know, whatever that is. You have all these things. So there's still decisions through media, right? You got Doge? Yes, you have meme coins and all this stuff. And also, some of the other tokens that were invested in like the defy and metaverse space, trying to explain this stuff in plain English. It's not easy. So we have descriptions of these, but you and I both said, like, it's the third web. That's all you need to know. But you and I said,

let's go through and try to explain this stuff ourselves. And each of these tokens, try to do it in complaining. Some of them are not easy. You did a commendable job. You did a commendable job. We tried. Read one. Do you want to read one? You don't have to. Okay. I'll find those for later. Here's another thought I had on this whole thing. This to me was a pandemic project where I think a post-pandemic work world actually made it easier to put something like this together. So I want to, first of all, kudos to you. You were like the general contractor on this project. Like if you're building a house, You need a general contractor to do, like, the person to do the trim and the paint and the framing. Can I run with an analogy for a second?

Let's do it. As we were building this house, I was freaking out because my materials were going up so much in price. Yes. I looked at the Slack of timestamp this. We started talking about this when Bitcoin was like $41,000. And one of the biggest fears I had in the back of my mind was, we are racing against an ETF. Yes. And when the future's ETF was announced, the price almost rose to $70,000.

And I was like, my materials, my materials. I was freaking out. Yes. Our biggest nightmare was we're going to roll this out at Bitcoin 75K, and we do not want to have our clients invest in this stuff when it's at a huge all-time high. And so the fact that it's come in a little bit was like a sigh of relief for us. I view this as a blessing because buying into a panic, a buying panic would have been awful, would have been just awful. Now, while it's not fun to see that you launch an index the next day

prices crash 20%. In our seat, like I'm invested. I don't care, but if our clients, I'm thrilled that they get to invest at lower prices. Yeah, it's good. We were like the guinea pigs on this. We invested it. So we're taking part of the losses, but the pandemic stuff. So we're working with on ramp to have the technology side on this, and wisdom tree is helping on the investment side, and the Gemini's the custodian.

I feel like if this was five years ago, someone would have said, all, that's enough. There's too many parties here. We're all meeting in New York. Before we get that, we're having everyone in there. But instead, there were calls where we had four, five, eight people from different organizations on and people could kind of work as they were talking on Zoom. So I feel like the work from home pandemic. stuff actually made it easier to pull off a project like this in a relatively quick

amount of time. I had to consider that, but you're 100% right. So let's get into briefly some of the price section that we saw over the weekend. So I woke up on Saturday morning, check my Masari app, and I see the entire complex down 17%. I'm like, oh, shit. So it's such a crazy part about this is you wake up in a bear market with crypto. You go to bed and you wake up and it's a bare market. We spoke about it's a billion times that risk is always guaranteed with any asset class. Returns aren't. But especially with stuff like this, like, I promise you that I was saying to the advisors, like to position sizes, I promise you, you're going to wake up in a 20% bear market overnight. And I didn't think it would happen this quickly. I wrote a piece on this

of the weekend and you were kind of go back force with me. Like, this is where wealth management has to, like, step in big time, like advisors setting the right expectations for this. This is like 24-7 markets. No advisors ever dealt with that before. It's not like advisors have been trading 4x or something. This is completely different where a client could say, Why am I down 25% on the weekend? It's like, well, that's how crypto works. All right. So it was interesting, again, Bianco coming in with the killer charts.

This was the worst one-day performance. We're clocking midnight to midnight, going back to looks like May or June. And what was interesting was that usually in a bare market, Bitcoin performs better than all of the other coins. And we saw the opposite. Bitcoin fell more than Ethereum. A lot of the defy stuff got absolutely annihilated. But that was very interesting. see that. So I don't know if this is something to be aware of, to make anything out of this,

or is this just a one-time thing? But this is definitely different than all the previous sell-offs. It is interesting, especially since a lot of times it's the leverage that cascades these self and turns them into a waterfall. And there's probably more leverage in the other stuff, usually. So, yeah, that is. So anyway, Ben, what's your price target? So, all right, Shane Mack, we'll look to this in the show notes, wrote a really good post about wallets. And this was the salient point, talking about crypto wallets, like metamask and that sort of stuff. He said marketing will change too because of this. Today, marketers go after influencers. Tomorrow, they go after owners they find from wilds. And here's what he means.

In Web 3, everything is public to discover what address owns what. If I was going to launch a new product and wanted everyone who owned a board ape to know about it, I could air drop them some tokens or NFTs so they would know about our new product or service. The future of marketing is about making people owners right out of the gate versus trying to get them to like or follow or something. I read this piece too. You told me to check it out. Do you think that there's a ceiling on the wallet stuff, unless they make it way easier to use? Because, yeah. I mean, like, my parents have all their passwords on their computer on a Post-it note. They get a wallet and it's gone immediately. Mario Gabriali did a piece this weekend about Metamask, which was excellent. And one of the

points that he made was this was built by developers for developers. You have used Metamask. It is not user-friendly. It is not intuitive at all. So Rainbow is way easier. I don't think I could fund that because I'm in New York. I don't know if I'm wrong or not, but I couldn't link my credit cards to set that up. Anyway, yeah, no, wallets are like definitely not for the layperson. That idea of like sending products, that's like having your own email newsletter list of emails already and you have it out like so you can have targeted marketing basically. That doesn't make sense to me.

Hold the price of all of this stuff for a second. Like this is what is so exciting to me. So over the weekend, I have tickets for the Knicks and the Nuggets. They're playing on Saturday at 1 o'clock. It's a matinee game. usually a light audience. The tickets flex and price. So let's say that my floor for like the wizards, no offense.

Maybe that's a bad example because they're actually good. But whatever. Let's use the wizards. The floor price of my tickets are 115 bucks a seat, whatever it is. So for the Lakers that could go up to like $2,000, $300. I don't know the exact number. For this particular game, their face price was $220 a ticket. I was with the boys, as I said, Robin was away Thursday Friday.

So I think I listed the tickets on Thursday, forgot about them, panicked on Saturday and more. Like, oh, shit, I got to get rid of the. these, the Stubhubh fees are just hilariously outrageous, like legitimately it could be 20, 25%, but here's the thing that really pisses me off. There is a floor to how low you can go on the prices, on the tickets. So my face value was 220. I couldn't list it then below $98. Whoa. On Ticketmaster, this is on Ticketmaster. That was as low as I can go. On Stubbub, I needed to upload a PDF. I'm with the boys. I don't have time to upload a PDF. I don't even know how to upload a PDF from my tickets. Anyway, the tickets went,

low-hanging fruit. Come on. I couldn't sell the tickets. I fucking had to eat $450 or whatever it was. Here's a question for you on sports, not on Web 3. What age do your boys have to be before you start bringing into games? When are you going to indoctrinated them to become Nix fans? I don't know. So I think about this because... Six? I started going to games when I was a little boy. I was probably like seven or eight years old. I started indoctrinating my daughter into Michigan football the last few years and she didn't really care. And then all of a sudden this year, of course, when they're good, she cares. And I don't want to be that obnoxious fan that like brags and my team's good. But Michigan,

They're in the college football playoffs and, like, Michigan fans are growing crazy because it's been so long. But my 7-year-old, they played the Big Ten championship game at 8 o'clock. I probably didn't start until, like, 8-15, 8-30. Our kids are in bed by 8 usually. She asked, hey, can I stay up for the first half? I want to watch the game with you. And she's, like, into it, watching the football game. And sports are so dumb in the grand scheme of things when you think about it.

Like, God, why do I care so much about this stuff? But, like, getting that kind of stuff, like, my daughter wanted to watch the game with me, like, asking questions. Like, why is this? It was unbelievable. I have three of my best friends from college that we barely ever. see each other in America because people move to different cities and have families and just it happens. And sports pretty the last 10 years during a Michigan football game, the three of us will text each other exclusively about the game. Outside of the game, we never text each other. We don't

ask each other about family. The only thing we talk is sports. I mean, it's the same thing with my dad. That's our conversation. I think to keep things anyway. I mean, I'm sure you have this with your dad and the Knicks and stuff. Of course. Of course I do. Of course I do. I was looking through old photos yesterday. My dad brought over a box of all the photos, which was incredibly nostalgic to do. And one of the pictures that I happened to pull out was a 15-year-old Michael, hair and everything. And I'm sitting at my desk in my bedroom, and I've got like posters from Slam magazine all over my wall. And books just, I'll throw this picture up so you could say it, just scattered everywhere. And one of the things that I have that is very like on brand for me 20

years later was a VHS tape of The Relic with Tom Seisbore. Wow. I loved most movies when I was 15. Love that. It was the American Museum of Natural History in Chicago. Okay. Interesting. Love that movie.

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That's a good one. Anyway, oh, this is interesting. I didn't have time to read this. Grayscale did their investor survey. And at first, I'm like, this is such bullshit. But then I'm like, well, I might be able to buy this. they said that one in four Americans with over $10,000 in investable assets reported and owning Bitcoin in some form. And now that I say that out loud, there's no way that's true because the percentage of people that have more than $10,000, I'm going to guess half of them are over 50.

Oh, that's true. Good point. And so just based on that alone, there's no way that this is true. I would say that one and four young investors probably one. I bet you did under the age of 50. Under the age of 50, I bet one and two. I bet it's like very high. Yeah, that's good.

We haven't debunked a good survey in a while. It has been a minute. All right, Barron's had a piece this weekend that they think the housing boom could last for a decade. And they're talking about housing stocks. But there was a few interesting tip. We talked about this last week a little bit. They basically said, so construction starts a new single family housing is finally going to top $1 million this year after being like $750,000 a year for the previous 10 years.

That's still way below like $1.6 million annual housing starts from 2004 to 2000. 2006, which is the bubble. But they're saying to actually meet the supply constraints we have with housing in this country, we would need two million housing starts a year for a decade to get there. Are you doubling down on your housing prices are too low take? Possibly. But yes, it's just the whole thing is not even like a demand thing. It's totally a supply thing. I don't think that it's even that demand is like crazy and people are going nuts for houses. I just think there really aren't enough houses. Housing supply is even more constrained than Bitcoin. supply, right? Yeah. Yeah. That's my whole thesis is that there just aren't enough houses

and that the scars from the last bubble, the hangover from that, just wrecked the housing industry, unfortunately. All right, listener question here. We've got time. Let's thank through a few of these. All right. Let's take him in order. My good friend that his dad recently made a significant investment to a company that claims to be a, quote, unique private bank, oh boy, and offers a guaranteed return on their investment using crypto and other strategic investments. Oh, man, you know what I just did? You know that Antonio Banderas. where he's like, he and his dad are now, oh, God, affiliate marketers. Now I'm doing the soccer coach.

Red flag, red flag, red flag. Affiliate marketers for this company. And it pains me to see his family get sucked into an obvious pyramid scheme that will eventually scam them out of money. Do you guys have any advice on how to make them realize they're making a terrible financial decision before it's too late? Yes, I do. There's a little book called Don't Fall for It.

by an author named Ben Carlson. Speaking of that, we got a hilarious email yesterday. This literally made me laugh out loud. Somebody said to us, here's the subject. Is Ben Mooletney as an NFL kicker? Did you see this? No. Hey, guys, love the show and forgot to send this in last week.

By the way, this is another example of sports bringing people together. Hey, guys, love the show and forgot to send this in last week after I saw it. This came up on Yahoo fantasy football on the page for Greg Zarlign. after another guy named Carlson went bananas for Las Vegas last week, gave me a good laugh, keep up the good work. Somebody wrote, oh my God, why did I play this turnover, Ben Carlson? Loser. Oh, then someone said, it's really Dan Carlson. Somebody said, same, why do you have two kickers? And then somebody wrote, it's Dan Carlson, face palm.

All right, that makes sense. So anyway, it's really difficult to convince, oh, what's that line? It's easier to scam somebody than to convince them that they've been scammed. I think it's basically impossible. If someone who's in it, and they even promise that if you just bring in 10 more people, and then if they bring in 10 more people, it sounds so like... Oh, Mark Twain, allegedly, whatever. The allure of that is just... It's easier to fool people than to convince them that they've been fooled.

That's a Mark Twain nugget. Especially if they're already in it, it's not like they're just considering it. I don't think that you're going, anything you say is there's nothing you do, basically. Unfortunately, there's nothing you can do. You could try, but it's like you feel powerless. It feels like you're watching a slow motion train wreck. Yeah, I don't think that. Unfortunately, they're tough. Yeah. Tough situation. Hi, Michael and Ben. I am trying to move to an upgraded home in the next five

years in order to do that, I think I need more than just the equity and hopefully increase value of my current home. Are there any strategies you would suggest outside of just putting money into a savings account to be ready for the purchase? We're still putting these in the dock. I guess. Well, in the next five years, I don't even know at this point. At a certain point, I mean, I guess if my housing thesis is correct, you may have. have to change your expectations for what your next house is going to be, the trade-up, depending on how much your house goes up in value. Listen to the episode that we did with life goals. We spoke all about this. This is an

unenviable situation that, unfortunately, so many people are living with, and Ben seems to think it's not an issue. Next question. Last one. One more. I love your show, and since I heard all about Michael's refi horror story, I figured I share mine. Oh, again, check out DOMA. Great episode. We bought a house in December in 2019 with an adjustable jumble loan of 3.5%. That was the best deal we could find at the time. A few weeks ago, credit card advertised by Ally powered by better.com to me. Oh, did you see that video of the better.com CEO laying off 15% of the workforce? Oh, wait. This guy laid off 15% of his staff on Zoom? On Zoom. It was cringe. It was really bad. After filling out a simple application online,

the next day they offered us a fixed 30 year at 2.75. They gave us a choice to either take some money out of the property or just refied the existing job alone. We did the latter. The entire process took only three weeks with 99% of it seamlessly done online. On a final day, we had a not a notary come to our house to sign a few papers, which took only 15 minutes. Not once did I have to explain my credit card bills or what I spent my money on, as Michael unfortunately did. If this isn't a clear sign of FinTech's the future, I don't know what it is. Oh, interesting. I thought this was going to go the other way. This was a good. Okay. So this thing FinTech solved the problem a little bit. We did one of ours with Ally too, and they did send a notary to the house to

take care of it, which made it easy. So I guess this is short your brick and mortar bank, basically. Fintech is going to save the day. By the way, I thought one of the best parts about our DOMA talk was the fact that you have assumed all these years that blockchain is going to fix title insurance. He said, no, no, no, blockchain's not really going to fix it. That's not the problem. That threw me for a loop. When he said that, I was like, what? All right, let's get to recommendations. I have a bone to pick. I can't explain this to you. Everyone's got like weird holes in their life. And one of mine is the born series. I saw the born identity in theaters when I was 17 years old, and I remember loving it. It's a great movie. Speaking of which,

Matt Damon, is he the best actor of all time? That's absurd. Is he the most prolific actor of our generation? He's got to be pretty close between him and Leo. No, no, no. Leo has done like a dozen movies. Oh, you're saying prolific. Okay. Matt Damon has been in Morgan movies than any other actor. I guess maybe like T.C. is up there. His batting average is pretty high. But what a guy. All right, anyway, the born identity, saw it, loved it. And for reasons that, I can't explain, I never saw ultimatum or supremacy. And then they made another one after that, right? Right. Here's the bone that I have to pick. So this weekend, as I explained already, Robin was away. So on Saturday night, I fired up the born supremacy. Is that the sequel? I think so. Ultimatum is maybe the third one. Okay. So on HBO Max, they have the born trilogy. They have the born. Identity, the Born Supremacy, and the Born Ultimatum, which is the Jeremy Renner one. Oh, really?

They skipped the third one. No wonder what the stock sucks. That's true. I saw that the other day. It even has its own little thing, the Born trilogy, it says. I mean, I've got a legit gripe. Put the third one up. Get the Jeremy Renner one out of there.

Was that one good? They're paying too much on that AT&T dividends still, if they can't avoid the other born one. The Born ultimatum, I think Ultimatum was the Renner one. Oh, no, this is the last one. Anyway, I'm pissed. I'm pissed. Rightfully so. Okay. Here's a question.

Is Paul Thomas Anderson overrated? Okay. What else does he have besides Boogie Nights? There will be blood. Okay. And Magnolia, which I've never seen. Okay. Magnolia is pretty good.

I feel like there will be blood as a movie you see once and once only. It's not a rewatchable movie. I've seen it twice, but I agree. Okay. Hard eight, which was Paul Thomas Anderson's first movie, which I spoke about a year ago, very much enjoyed that one. However, all right, so he's obviously got these classics. Pughey Nights, one of my favorites ever. You ever watched The Master? I didn't see that one. Turned it off after 15 minutes. So he's like obviously like a filmmaker. You know what?

Not a filmmaker guy. There, I said it. Because I watched Punch Rock Love over the weekend on Friday night. It's a depressing movie, isn't it? Not for me. I don't make it either. Whatever. Like, I don't even know what to say. Was it like well crafted? Was the music and the bub, blah, blah, blah. Like, all right, it's stunk. He's a film's critic director. How about that? He really is. So anyway, I'm just throwing it out there. Maybe Paul Thomas Sands is. is overrated. All right, that's a good take. So I asked last week,

just because I love watching Christmas movies around the holidays, I don't know why. I'm mad at you, by the way. I'm sentimental, why? You should have let the audience know to not send us Alpha's recognition.

Well, you should have been there with me and said it. So we totally miss on Elf. The other ones we missed, so Love actually, people said, someone else had the ref, which is actually good

in the dentist. We did a miss. You came with this. You came with this. We got like 24 people to watch Elf. Like, I haven't seen Elf a dozen times. Here's one that I got,

though, that I didn't expect. there was a lot of votes for Four Christmases with Vince Vaughn and Reese Witherspoon And I remember watching when it came on a video And it was kind of forgetful So my wife and I, it's on HBO Max My wife and I watched it this weekend That was a good call by people

It's a funny movie What's it called? Four Christmases. Vince Vaughn? It's a little bit like, you know the horse Meme where the back of the horse is drawn really beautifully And then the front of horses

Like a bad pencil drawing? It's a little bit like that Where the humorous front-loaded But I enjoyed it. I remember it being forgetful So Robert Duval plays his dad and I've never seen him in a comedy before. Maybe he's been in one back in the day.

It's really good. It's a dumb over-the-top plot kind of thing. If you're a nitpicky person, don't watch it, but I liked it. Who's going to nitpick a Christmas movie? Can I say one more thing? Yes. On Saturday, Robin's sister was with us. I was in my office, and I heard a very familial jingle.

It was the Home Alone music. And I haven't seen Home Alone in 20 years. Okay. We watch it every single year now. Okay. But that's John Williams, the guy that did, like, Star Wars and Superman and Indiana Jones in every... That song is very noticeable, yes. So, like, literally, I'm at my computer typing, whatever.

I was like, what's that? I was also kind of sad. I was like, that's my movie to watch with him. What's happening? So then at night, we were in bed and he goes, Daddy, we could watch Home Alone again? He's four. It was like the sweetest thing ever. Very watchable.

All right. I was wavering on Succession last week. Did you watch this week's or not? No, I'm two weeks behind, and I'm not happy about it. All right. Sorry, I was wavering. All-Timer episode last night. I am all in. I was like, oh, this show is kind of like dragging. Nothing's happening. So my favorite three episodes of all time. One, Tom's Bachelor Party, just hilarious. Two, I think my second favorite one is probably last year's season finale. We're on the yacht and they're traveling all over the place. I like the travel ones. This one, they go to Tuscany. They're in Milan. This episode, my wife and I were still talking about the episode this morning. It was so good and I'm so back. And I can't believe this wasn't the season finale. So much happened. I'm not going to spoil anything.

How were you ever gone? I wasn't. Remember I said I like it? I don't love it. Last night's episode, all timer. And there was a moment at the end. And right when you see it, you're going to slack me. And you are going to lose it.

I'm not going to spoil anything, but there is one moment on this show. Chris spoke to me this morning. He said, did you watch your session? No. All right. Just text me when you see the scene. You'll know it. But there's four or five scenes where afterwards my wife and I both go, oh my God, I can't

believe they went there. It is so good. And then finally, one more. I watched the first episode. of the Beatles doc on Disney Plus, and it doesn't even feel like a documentary. It feels like a movie that they made to look like a documentary. Like, it's so, my theory has always been nothing's properly related because of the internet, maybe The Beatles are properly rated. Every once in a while, someone on Twitter will be like, the Beatles are overrated. I hate that too. No one really believes

that, but my parents were never like big pop culture people. That's probably because they couldn't re-show us a lot of movies or TV shows. But the only thing my dad, like, hammered home into us, besides being Michigan football fans, is you're going to like the Beatles. And that's a band that still to this day, you look back at this stuff. That documentary is so good, isn't it? Do you start watching it? I saw probably two hours or so. I can't believe that they're just in this huge, big space. It's surreal. It is surreal. It's surreal to watch. Yeah, that's the best way to describe it. All right, Ben, listen, I will see you on Thursday for the Component Friends episode. I will be in New York, yes? And we're going to go see a comedy show. So I'm asking, speaking of the Beatles with peace and

love, I'm asking fans that see us in public, please give us some space. We're people. We're people too. Don't try to steal Michael's amount of Esquot. Animal Spiritspod at gmail.com.